Altman testifies that Musk weighed handing OpenAI to his children, court hears

OpenAI chief executive Sam Altman took the witness stand on Tuesday in the lawsuit brought by Elon Musk against OpenAI. In his testimony, Altman said Musk had at one point during OpenAI's founding period discussed handing the company to his own children. It was one of the closing testimonies of a two-week trial.

According to Altman's testimony, Musk's approach clashed with one of OpenAI's founding principles. "OpenAI's purpose was to keep advanced AI from being concentrated in any single person's hands," Altman told the jury. "Mr Musk's insistence on controlling the initial for-profit structure therefore gave me pause."

Musk's case argues that OpenAI's initial donations, and its later transformation into a for-profit structure, mean roughly $1.06 billion in damages. Musk's argument is that OpenAI, founded as a charitable foundation, has drifted from that mission to enter into a commercial partnership with Microsoft.

Altman in his defence referred to lessons he had learned during his time at Y Combinator: "I knew that founders who take control of a company at the start usually do not give it up later. So I was cautious about Musk's wish to control the for-profit structure at the start."

His lawyer William Savitt asked how it felt to be accused of stealing a charity. Altman replied: "Through a tremendous amount of hard work we created this large charity — you cannot steal it. Mr Musk did try to kill it, I guess. Twice."

According to court reporting by The Verge, Altman took the stand in a "nice kid from St. Louis" manner. He came in with a binder of filed exhibits. Over the two weeks of testimony, other witnesses had characterised Altman as a "lying snake"; his defence rejected those characterisations.

Musk's legal team argued that in a 2017 email exchange Altman had spoken "opaquely" about OpenAI's structure. In that exchange Altman had told Brockman and Sutskever that a for-profit structure would be "more attractive" to investors. Altman responded: "Email conversations are about the work we plan to do tomorrow, not the final decisions."

A central question in the case is whether OpenAI's $1 billion 2019 investment deal with Microsoft was in keeping with its non-profit foundation status. OpenAI's lawyers argue that the contract was concluded through a for-profit subsidiary and that the foundation retained absolute governance over the structure.

Musk left OpenAI in 2018 and went on to found his own AI company, xAI. xAI closed an $8.7 billion Series B last year. If Musk wins this case he could claim around $1 billion in foundational assets from OpenAI.

The court is expected to deliver its ruling next Friday. As a legal matter, the boundary between a for-profit subsidiary and a charitable foundation falls in a grey zone in American foundation law. That is why the decision is being followed beyond the AI sector, by broader US charity-law observers.